Looking for an investment website business plan? You're in the right place.
A site that publishes investing research and sells subscriptions has to answer questions a backer will ask before any money moves. How many free readers turn into paying members, and how many of those cancel each month? What does each member cost to win and what are they worth? How much cash does the site burn before the membership base can pay for the writers? And where does a publisher stop and an investment adviser begin? A blank template won't show you what a sensible answer looks like.
In this article we'll walk through a complete sample business plan for an investor-education and research website in Richmond, Virginia, section by section, so you can see what good looks like and write your own with confidence. We'll cover the executive summary, the SWOT analysis and, in particular, all of the financials.
Here's what you'll take away:
- The executive summary: see how to describe a subscription publication on one page, so a reader knows the audience, the price and the ask within a minute
- The publisher's line: learn how a plan states what a research site will and won't do, so a backer or a lawyer sees you have drawn the boundary
- The member funnel: trace visitors to free readers to paying members, and check each step against the traffic you can realistically earn
- The membership table: see opening members, new members, lapses and closing members side by side, so churn is in the plan and not a surprise
- The unit economics: work out what a member costs to win, with and without the marketer's wages, and what they leave behind, before you fix a marketing budget
- The first year, month by month: spot the months that burn the most cash, and size your reserve to match
- The five-year profit, cash flow and balance sheet: understand how each hire, price and traffic input shows up in the numbers
- The downside case: have an answer ready for "what if fewer readers convert and more members cancel?", with the steps the founder takes in response
If you're planning a paid research or education site, read this before you write your own. The business is fictional, so take what fits your publication and change the rest.
In this plan
If you need a investment website business plan template for your own plan, start it in the Toolkit.
Summary
Fall Line Investor is a Richmond, Virginia publisher of investor education and independent stock research. It opens on 1 January 2027 as Fall Line Media, LLC. Readers get free articles, guides and a weekly email; paying members get the full research library, the model spreadsheets and the data-backed screens behind the articles. Founder Marcus Hale owns the majority of the company, and two angel investors hold the rest.
The publication earns from four lines: paid membership at $29 a month or $249 a year, display advertising and email sponsorship, referral fees from brokerages and software vendors, and self-paced courses. It publishes general analysis for every reader at once. It does not give personal advice, and it does not promise returns.
The company raises $720,000: $180,000 of Marcus's savings and $540,000 from two angel investors. Of that, $626,500 is held as a reserve, $54,000 builds the site and buys equipment, and $39,500 pays for securities counsel, licences and the launch campaign.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Revenue | $233,188 | $426,885 | $711,819 |
| Net income after start-up costs | ($283,323) | ($210,271) | ($37,358) |
| Closing cash | $393,288 | $194,710 | $166,545 |
The site opens with 650 paying members, converted from the founder's own free newsletter of 18,000 readers, and ends 2027 with 956. Net growth is slow because about 5% of members leave each month, so most new sign-ups in Year 1 replace members who have gone. The site loses money in every month of Year 1: salaries, the data licence and marketing start at launch, while membership builds slowly. Year 4 is the first profitable year.
A subscription downside is built in. With conversion of readers to members 20% lower and monthly churn at 6%, plus a cost response from month 13, cash stays positive in every year, but the low point is $35,029, under one month of Year 3 costs.
The Publication
Legal name: Fall Line Media, LLC, a Virginia limited liability company, publishing under the name Fall Line Investor. Owners: Marcus Hale (majority) and two angel investors (minority). Base: coworking space in Richmond, Virginia, for the first three years. Start date: 1 January 2027. Stage: pre-launch. The site build is under contract, the member area is in testing and the 18,000-reader newsletter list is ready to carry over.
What the site publishes
Plain-language guides on how markets, filings and valuation work, company write-ups built on public filings, a monthly screen of companies that meet stated criteria, and spreadsheet models that members can download. Every piece is addressed to all readers at once. The site has no client accounts, no portfolios and no personal recommendations.
Four income lines
| Line | How it earns | Share of Year 1 revenue |
|---|---|---|
| Paid membership | $29 a month or $249 a year list price, $18 a month blended in Year 1 | 74% |
| Advertising and email sponsorship | Display ads per thousand page views, and sponsored sends from July | 14% |
| Referral fees | Fee per funded brokerage account or paid software sign-up | 6% |
| Courses and paid guides | $149 course, $29 guides, from May | 6% |
Goals to the end of 2028
- 956 paying members by December 2027, up from 650 on opening day.
- 1,593 members and $426,885 of revenue in 2028.
- A free email list of about 25,000 readers by the end of 2027.
- Written legal advice on the publisher's position before the first paid article goes live.
What the site will not do
It will not answer a member's question about what they personally should buy or sell. It will not review portfolios or build one for a member. It will not take payment from an issuer to write about its securities, and it labels every sponsored send and affiliate link. It will not use a member's return, or the site's own picks, as a marketing claim. Each of these rules follows from the legal position set out under Publishing Operations and Compliance.
The Reader Market
Self-directed investors
The readers are people who pick their own investments and want to understand what they own. No survey of US investor numbers was verified for this plan, so the plan does not size the audience. The model needs members, not a market share: 4,887 paying members by Year 5, drawn from a free readership of about 205,000 visitors a month.
Who the labour market says writes this work
The Bureau of Labor Statistics reports a median pay of $103,570 for financial analysts in 2025 and projects employment growth of 7% from 2025 to 2035, against 3% for all occupations. For writers and authors it reports a median of $76,910 in May 2025 and projects no growth from 2025 to 2035, noting that increasing use of AI for writing is part of the reason. The plan pays its staff writer-analyst $78,000 and its senior writer-analyst $96,000, between the two medians, because the job needs both skills.
How the model treats price
Prices for rival research and education services are not quoted here. They change often, and each provider publishes its own. The plan's own price of $29 a month or $249 a year is the plan's own figure. The model books $18 a month per member in Year 1, after the 25% founding-member discount and promotions, and $20 from Year 2.
Where else a reader could go
| Alternative | What it offers | Why a reader picks it | How Fall Line Investor differs by design |
|---|---|---|---|
| Regulator and exchange education sites | Free explainers on products and risks | Free and neutral | Company-level analysis and models, which they do not publish |
| Large advertising-funded financial media | Free news and commentary | Breadth and speed | Fewer topics, deeper write-ups, no pop-up ad load for members |
| Brokerage-published research | Free to account holders | Already in the account | Written for readers with no tie to a trading platform |
| Independent paid newsletters | One writer's picks or themes | Trusted voice | A team, downloadable models and a stated disclosure policy |
| Video and podcast creators | Free explainers | Entertaining | Written, searchable and sourced |
The table describes what each category offers and how this site positions itself, not a ranking.
Where the site is strong and where it is exposed
| Strengths | Weaknesses |
|---|---|
| A founder with six years in equity research and four of publishing | Search traffic to a new finance domain is slow to build |
| 18,000 free readers ready to be asked for a subscription | Founder is the face of the site and a single point of failure |
| Payment and platform fees take only about 5% of revenue | Payroll is 109% of Year 1 revenue, and the contribution after editorial cost is negative in Year 1 |
| Opportunities | Threats |
|---|---|
| Referral and sponsor income that grows with traffic | Regulatory change affecting publishers and affiliate pay |
| Courses that turn free readers into buyers | Free AI tools answering the same questions |
| Annual plans that lower churn | Falling markets, which can slow sign-ups and raise cancellations |
Who Pays for Research
The reader who does their own picking
The typical member is between 30 and 60, holds a brokerage account and a retirement account, and spends several hours a month reading about companies. Many work in unrelated jobs: engineers, doctors, small-business owners. They are not looking for someone to manage their money. They want a source they can check.
Where they read now
Free articles, brokerage tools, a podcast or two and sometimes one paid newsletter. The gap the site targets is between a free headline and a sourced company write-up with the working shown.
What starts a subscription
A market move that sends a reader looking for explanation, a stock they already own, a free article that is better than expected, or a model spreadsheet they would otherwise build themselves.
What they expect of the site
Sources linked, authors who say what they own, no private tips, and a price that does not change at renewal without notice.
What ends one
A subscription that feels like an alert service, a quiet month for the reader, or a rival offering the same material free. The model's 5.25% monthly churn reflects all three. It is a planning figure, not a measured rate.
Turning Readers into Members
The route from free reader to member
A reader finds a free article through search, a referral or a newsletter. A metered paywall offers three free pieces a month. After that the reader is asked for an email address, then offered a 14-day trial of the full library. A short onboarding sequence over the first week points to the models and screens. At day 10 the reader is asked to choose a plan.
Plans and pricing
Two plans: monthly at $29 and annual at $249. Founding members who join before 31 January 2027 pay 25% less for their first year. A 45/55 mix of monthly and annual members would gross about $24.50 a month; the model books $18 in Year 1 and $20 in Year 2, rising 3% a year after that, to allow for founding discounts, promotions and trial periods. Annual plans cost less per month, so the plan steers readers to them. No plan carries a return guarantee or a claim about performance.
The funnel in numbers
One conversion rate drives the model: 1.7 new paying members for every 1,000 monthly visitors. It is held constant so that growth comes from traffic and not from an improving rate. Monthly visitors start at 22,000 in January 2027, mostly the founder's existing readers, and rise to 50,000 by December 2027, 85,000 by December 2028 and 205,000 by December 2031. Reaching 50,000 a month on a domain that is new to search engines in its first year is the most demanding input in the plan; the downside case tests a lower conversion rate, and a traffic shortfall would show up the same way.
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Visitor-months (sum of monthly visitors) | 446,000 | 827,500 | 1,312,500 | 1,820,000 | 2,267,500 |
| New members won after launch day | 758 | 1,407 | 2,231 | 3,094 | 3,855 |
| New members per 1,000 visitor-months | 1.7 | 1.7 | 1.7 | 1.7 | 1.7 |
Members year by year
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Members at start | 0 | 956 | 1,593 | 2,558 | 3,712 |
| New members (Year 1 includes 650 on opening day) | 1,408 | 1,407 | 2,231 | 3,094 | 3,855 |
| Members who lapse | 452 | 770 | 1,266 | 1,940 | 2,680 |
| Members at year end | 956 | 1,593 | 2,558 | 3,712 | 4,887 |
Lapses are 5.25% of the previous month's members, summed over the year. The 650 founding members make Year 1 look healthier than the rest of the plan: after launch day the site adds only about 63 members a month against about 38 lapses.
Where new members come from
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Paid-channel spend (about 60% of running marketing, plus $4,000 of launch campaigns in Year 1) | $38,000 | $42,000 | $51,000 | $57,000 | $60,000 |
| Members from paid channels at $120 each | 317 | 350 | 425 | 475 | 500 |
| Members from search, email, partners and referrals | 441 | 1,057 | 1,806 | 2,619 | 3,355 |
| Share from unpaid sources | 58% | 75% | 81% | 85% | 87% |
The plan puts the cost of a paid member at $120. Paid acquisition costs for financial subscriptions vary widely and no source is cited for this one. The rising unpaid share is the plan's main dependence: it needs search and email to keep converting at the same rate as the audience grows.
What a member is worth
A member at $18 a month leaves about $17.19 after card and billing fees. At 5.25% monthly churn that is about $327 of margin over an average life of 19 months. The next table sets that against two measures of acquisition cost. Marketing-only cost divides the marketing budget (with the $18,000 launch spend in Year 1) by members won after launch day. The fully loaded figure adds the audience and email marketer's wages from month 10, before pay raises.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Margin per member per month | $17.19 | $19.10 | $19.67 |
| Lifetime margin per member | $327 | $364 | $375 |
| Cost per member won, marketing only | $98 | $50 | $38 |
| Cost per member won, fully loaded | $125 | $109 | $76 |
| Months to repay fully loaded cost | 7.3 | 5.7 | 3.8 |
| Lifetime margin divided by fully loaded cost | 2.6x | 3.3x | 5.0x |
On the paid channels alone, at $120 a member, Year 1 repays in about seven months. These ratios are before editorial cost. The contribution table in the operations section shows that Year 1 does not cover the cost of making the content.
Reaching Readers
What Year 1 spending buys
The Year 1 budget is $74,000: $18,000 of launch spending paid from start-up capital plus $56,000 of running costs. The total is 32% of Year 1 revenue; the running costs alone are 24%, falling to 12% in Year 3 and 7% in Year 5 as search and referrals carry more of the load. The budget buys 758 members after launch day.
| Channel | Year 1 spend | Members expected |
|---|---|---|
| Brand, identity and launch pages (launch) | $5,000 | n/a |
| Evergreen guide library, about 40 commissioned pieces (launch) | $9,000 | counted with search |
| First paid campaigns (launch) | $4,000 | counted with paid search |
| Paid search and social | $14,000 | 135 |
| Newsletter swaps and sponsored placements in other publications | $9,000 | 70 |
| Podcast guest spots and sponsorships | $6,000 | 45 |
| Retargeting and trial-conversion email | $5,000 | 67 |
| Search tools and link outreach | $8,000 | 330, with the guide library |
| Partner webinars with software and data vendors | $6,000 | 45 |
| Investor expos and meetups | $5,000 | 36 |
| Member-refer-a-member credit | $3,000 | 30 |
The channels sum to the $74,000 budget, and expected members sum to 758. Paid channels (the four from paid search to retargeting, plus the $4,000 campaign) cost $38,000 for 317 members, about $120 each. Some readers will touch several channels before joining, so the split is approximate.
Milestones
- January 2027: 650 founding members onboarded and the weekly email sent.
- April 2027: 729 members and the guide library 80% complete.
- June 2027: 770 members, and the first course goes on sale in May.
- September 2027: 852 members and sponsored sends in their third month.
- December 2027: 956 members and about $17,200 of monthly membership revenue.
Disclosure in marketing
Affiliate links carry a plain label next to the link. The FTC's guidance for people who promote products says a material connection, which includes a financial relationship, must be disclosed. Podcast and swap partners are told the same. The site makes no claim about what members earn.
Publishing Operations and Compliance
Editorial output
The site publishes about 260 pieces in Year 1, 340 in Year 2 and 420 in Year 3, between 5 and 8 a week. Commissioned writers supply 75, 90 and 105 of them at about $400 each. Editorial cost per published piece, counting the founder and writer-analyst salaries before pay raises, commissions and the data licence, is about $910 in Year 1, $798 in Year 2 and $675 in Year 3. A weekly editorial meeting sets topics, and no piece is published without a second reader.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Gross profit (after payment and platform fees) | $220,727 | $404,074 | $673,782 |
| Editorial cost (salaries with on-costs, commissions, data licence) | ($236,595) | ($271,360) | ($283,360) |
| Contribution after editorial cost | ($15,868) | $132,714 | $390,422 |
| As a share of revenue | -6.8% | 31.1% | 54.8% |
Payment and platform fees take only 5.3% of revenue, so gross margin alone is a misleading measure for a publisher. After the cost of making the content, Year 1 is negative and the rest of the cost base (marketing, software, rent, support and the other staff) is paid for from Year 2 contribution.
The publisher's line
The Investment Advisers Act of 1940 defines an investment adviser as a person who, for pay, advises others about securities, directly or through publications or writings. The same section excludes "the publisher of any bona fide newspaper, news magazine or business or financial publication of general and regular circulation" (15 U.S.C. § 80b-2(a)(11)(D)). In Lowe v. SEC (1985), the Supreme Court held that the petitioners' newsletters fell within that exclusion. As the decision is commonly read, the Court looked at whether the advice was impersonal, whether the publication was genuine and not a personal service in disguise, and whether it was sold to the public on a regular basis.
Fall Line Investor is designed around those points. Every member receives the same content on the same schedule, staff do not answer questions about a member's own holdings, and the site has no model portfolio tailored to an individual. The plan does not take it for granted that the exclusion applies. It budgets $20,000 for written advice from securities counsel before launch and $16,000 a year in professional fees, which includes counsel's review of content policy. State securities rules are for counsel to check and are not summarised here. If counsel advised otherwise, the product would have to change, and so would this plan.
Live events are where the line is most easily crossed. The plan spends $11,000 in Year 1 on webinars, expos and meetups. At these, staff speak only in general terms, do not discuss an attendee's own holdings or suitability, and use a short scripted statement that the session is general education. Questions about a person's own situation are declined, and counsel reviews the script. Personalised answers risk the publisher's status, so the same rule applies to member support and email replies.
Disclosures and conflicts
- Every article states what the author owns of the securities discussed. Staff may not trade in a security for a set period before or after publishing on it, and may not trade against a published view. Counsel is asked to set the policy so that it also covers scalping, which is buying ahead of a recommendation and selling into the reaction, and the antifraud provisions.
- Section 17(b) of the Securities Act of 1933 prohibits describing a security for consideration, received directly or indirectly from an issuer, underwriter or dealer, without fully disclosing the receipt of that consideration and its amount. The site does not take payment from issuers to write about their securities. Sponsorships from brokerages, who may be dealers, and referral fees are another matter. Whether they fall within section 17(b) is a question for counsel, and the plan does not treat a fixed fee as a way around it. Sponsored sends and referral links identify the sponsor, and amounts are disclosed wherever counsel advises.
- Referral agreements are reviewed by counsel before signing. Pay that varies with account trading, or with the securities a reader buys, is not accepted in the model. Counsel also advises whether any fee linked to funded accounts raises registration questions.
- Each page carries a statement that content is general education and not personal advice, that investing involves risk including loss of principal, and that past results do not predict future ones.
Platform, data and security
A hosted content system with a paywall and billing layer, an email platform, analytics and a customer relationship tool cost $30,000 in Year 1 and $58,000 by Year 5. A contract developer works about 20 hours a week throughout at $45,000 a year. The market-data licence costs $18,000 in Year 1 and $37,000 by Year 5; vendors price by display and audience, so the licence terms for showing quotes to the public are checked before the first charts go live. Card details are handled by the billing provider and never stored on the site.
Office and insurance
Three desks and a meeting room in a Richmond coworking space cost $1,800 a month ($21,600 in Year 1), four desks cost $26,400 in Year 2, and a small leased office replaces coworking in Year 4. Insurance of $12,000 in Year 1 covers publisher's liability for errors and omissions, cyber, general liability and workers' compensation, and rises to $23,000 by Year 5. Some publisher policies exclude claims arising from investment advice, so the wording is checked with a broker before launch. These are budget figures and not quotes.
Questions a backer will ask
- Entity and investor terms. Marcus holds the majority of the LLC and the two angels the rest. The split, any preference on investor money, board seats and exit terms are not modelled and would be set in the operating agreement.
- Sales tax on digital subscriptions. Whether subscriptions, courses and downloads are taxable varies by state and by product. It is not modelled, and an accountant would confirm it for Virginia and for the states where most members live.
- Refunds. The 14-day free trial reduces refund requests. Annual plans are refundable pro rata within 30 days. Refunds and chargebacks run at 0.9% to 1.3% of membership revenue.
- Annual plans and deferred revenue. Annual members pay $249 up front. The model recognises that income month by month, so the cash line understates cash received early, and a real balance sheet would also carry unearned subscription revenue as a liability.
- Growth of the free list. The 18,000-reader list is expected to grow by 2.5% of visitor-months, about 11,150 a year in Year 1, and to lose about a fifth a year, reaching about 25,000 by December 2027, with 956 members about 3.8% of it. The list is not part of the engine.
- Tax. The model charges corporate tax with losses carried forward. Federal rules limit how much of a past loss can be set against later profit, and start-up costs are generally spread over time and not deducted in the opening year. The engine models neither, so the nil tax in Years 4 and 5 is a simplification that an accountant would correct.
The Team
Marcus Hale, founder and editor-in-chief
Marcus spent six years as an equity research associate and analyst at a regional brokerage in Richmond, covering industrial companies, and then four years writing an independent investing newsletter under his own name while working in corporate finance. He holds a degree in finance. The $180,000 is his savings. He has left his job to publish full time.
Where the team is thin
Marcus has not run a paid membership at this scale, has not sold advertising and has not hired editors. The plan covers these with securities counsel on retainer (inside professional fees), an audience and email marketer from month 10 and a senior writer-analyst from month 37.
If Marcus is out
The staff writer-analyst carries a byline from month 4, and the weekly email is built from a template that any editor can send. Key-person insurance on Marcus is not budgeted. The plan keeps a house voice, a style guide and bylines on every piece so that the site does not depend on one name.
Advisers and ownership
Securities counsel reviews content policy and agreements. An outside accountant keeps the books.
The Financials
The model behind the tables runs monthly through 2027 and yearly from 2028 to 2031. Inputs are listed before the results so that each figure can be traced to a stated reason.
Raising $720,000 and where it goes
| Use of funds | Amount |
|---|---|
| Site build, member area and billing integration | $42,000 |
| Laptops, video and audio kit | $12,000 |
| Entity formation, state and city business licences | $1,500 |
| Securities counsel: publisher-status memo, terms, disclosures | $20,000 |
| Launch: brand, content library, first paid campaigns | $18,000 |
| Cash reserve to carry the losses through Year 3 | $626,500 |
| Total uses | $720,000 |
| Source of funds | Amount |
|---|---|
| Marcus Hale's savings | $180,000 |
| Two angel investors | $540,000 |
| Total sources | $720,000 |
Marcus Hale puts in $180,000 of savings (25% of the total) and two angel investors put in $540,000 (75%). There is no debt: a publication with no collateral and no income at launch has little to offer a lender, and repayments would land in the years when cash is thinnest. The $626,500 reserve is the largest line because the site loses money for most of three years. Operations and equipment use $553,455 of cash from 2027 to 2029, which leaves $166,545 at the end of Year 3, the low point of the plan. The split of ownership between founder and investors is not modelled.
Inputs behind the forecast
- Membership lists at $29 a month or $249 a year. A 45/55 mix of monthly and annual members would gross about $24.50 a month. The model books $18 in Year 1 after the 25% founding-member discount, promotions and trial periods, and $20 in Year 2 when the discounts fall away, then raises the figure 3% a year, to $20.60, $21.20 and $21.80. Year 1 revenue is month-end members times $18; later years use member-months times the yearly figure.
- The site opens with 650 paying members, about 3.6% of the 18,000 readers on the founder's existing free newsletter. After that, members come from one conversion rate of 1.7 new members for every 1,000 monthly visitors, held flat for five years. Members end each year at 956, 1,593, 2,558, 3,712 and 4,887.
- Monthly visitors rise in a straight line from 22,000 in January 2027 to 50,000 in December 2027, then to 85,000, 130,000, 170,000 and 205,000 in each later December. This is the most demanding input in the plan, because a new domain has to earn search traffic in its first year.
- Members leave at 5.25% of the previous month's total each month, a blended rate for monthly and annual plans that implies an average membership of about 19 months. It is a planning figure, not a measured rate.
- About 60% of running marketing goes to paid channels, where the plan puts the cost of a member at $120. The rest of the members come from search, email, partners and referrals. No source is cited for the $120 figure.
- Display advertising is monthly visitors times 2.6 page views times $20 per thousand page views, a planning figure and not a published rate. Sponsored email sends start in July 2027 at $800 a month and reach $2,400 in December, and sponsorship is $20,000, $32,000, $45,000 and $55,000 in Years 2 to 5.
- Referral fees come from brokerages and software vendors, set at $60 per funded account or paid sign-up, so Year 1 needs about 240. Each programme sets its own terms, and none is quoted here. Whether a fee linked to funded accounts raises registration questions is left to securities counsel.
- Courses and paid guides are a $149 self-paced course and $29 guides. Year 1 needs about 60 course sales and 190 guide sales, starting in May.
- Direct costs average 5.3% of revenue: 4.5% on memberships for card and billing-platform fees, 12% on advertising for ad-network fees, and 6% on courses for platform and card fees. Refunds and chargebacks are a separate line at 0.9% to 1.3% of membership revenue.
- Editorial output is about 260 published pieces in Year 1, 340 in Year 2 and 420 in Year 3. Commissioned pieces average $400, so the freelance budget of $30,000, $36,000 and $42,000 buys about 75, 90 and 105 of them. The $18,000 market-data licence covers delayed quotes, fundamentals and filings data and is a planning figure; vendors price by display and audience. Insurance of $12,000 is also a planning figure, and some publisher policies exclude investment-advice claims.
- Payroll adds 27% to wages for payroll taxes, health cover, workers' compensation and a retirement match (15% for the half-time support role, nothing for the contract developer). Wages in the personnel table are launch rates, and 3% annual pay raises are charged as a separate line from Year 2.
- Members and readers pay by card at checkout, so receivables come only from sponsors and referral partners, set at 10 days on average across the whole business. Annual plans are paid up front, but the model recognises that income monthly. Real cash would arrive earlier than shown and unearned revenue would sit on the balance sheet.
- Tax is charged at the federal corporate rate of 21% and the Virginia corporate rate of 6%, with losses carried forward in full. Federal limits on using past losses and the treatment of start-up costs are not modelled, so the nil tax in Years 4 and 5 is a simplification. An LLC would normally be taxed through its owners.
- No distributions are paid in the five years. Investor exits, further raises and any sale of the business are outside the model.
Revenue by income line
| Revenue stream | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Paid membership | $172,396 | $305,855 | $516,569 | $807,922 | $1,138,225 |
| Advertising and newsletter sponsorship | $31,992 | $63,030 | $100,250 | $139,640 | $172,910 |
| Referral fees | $14,400 | $30,000 | $50,000 | $70,000 | $90,000 |
| Courses and paid guides | $14,400 | $28,000 | $45,000 | $58,000 | $70,000 |
| Total revenue | $233,188 | $426,885 | $711,819 | $1,075,562 | $1,471,135 |
| Growth on prior year | – | 83% | 67% | 51% | 37% |
Membership is 74% of Year 1 revenue and 77% of Year 5. Advertising is the second line, at 14% of revenue in Year 1 and 12% in Year 5. Referral fees and courses are about 6% each in Year 1 and no more than 7% of any later year. Advertising rises with traffic and membership with conversion, so both depend on the same visitor line.
Month by month through 2027
| Month | Paid membership | Advertising and newsletter sponsorship | Referral fees | Courses and paid guides | Total revenue | EBITDA |
|---|---|---|---|---|---|---|
| Jan 2027 | $12,445 | $1,265 | $0 | $0 | $13,710 | ($24,318) |
| Feb 2027 | $12,607 | $1,387 | $0 | $0 | $13,994 | ($24,050) |
| Mar 2027 | $12,833 | $1,508 | $300 | $0 | $14,641 | ($23,437) |
| Apr 2027 | $13,118 | $1,629 | $600 | $0 | $15,347 | ($22,769) |
| May 2027 | $13,459 | $1,751 | $900 | $2,400 | $18,510 | ($19,775) |
| Jun 2027 | $13,854 | $1,872 | $1,200 | $2,000 | $18,926 | ($19,381) |
| Jul 2027 | $14,300 | $2,793 | $1,400 | $1,500 | $19,993 | ($18,371) |
| Aug 2027 | $14,794 | $2,915 | $1,600 | $1,500 | $20,809 | ($17,599) |
| Sep 2027 | $15,333 | $3,436 | $1,800 | $1,600 | $22,169 | ($16,311) |
| Oct 2027 | $15,915 | $3,957 | $2,000 | $1,700 | $23,572 | ($14,983) |
| Nov 2027 | $16,538 | $4,479 | $2,200 | $1,800 | $25,017 | ($13,616) |
| Dec 2027 | $17,200 | $5,000 | $2,400 | $1,900 | $26,500 | ($12,212) |
Every month of 2027 loses money before interest, depreciation and tax. The monthly EBITDA loss narrows from ($24,318) in January to ($12,212) in December as total revenue rises from $13,710 to $26,500, while membership revenue moves only from $12,445 to $17,200 because lapses absorb most new sign-ups. The monthly view spreads payroll and other costs evenly across Year 1 instead of starting each hire in its own month, so the January loss already includes the cost of people who join later. It shows direction and not timing, and the monthly cash path is not reported here. Year 2 loses $193,271 at EBITDA.
Newsroom and team hires
| Role | Annual wage | Starts | Year 1 end | Year 2 end | Year 3 end | Year 4 end | Year 5 end |
|---|---|---|---|---|---|---|---|
| Founder and editor-in-chief | $90,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Contract developer (about 20 hours a week) | $45,000 | Month 1 | 1 | 1 | 1 | 1 | 1 |
| Staff writer-analyst | $78,000 | Month 4 | 1 | 1 | 1 | 1 | 1 |
| Audience and email marketer | $66,000 | Month 10 | 1 | 1 | 1 | 1 | 1 |
| Member support (part time, 20 hours a week) | $31,000 | Month 25 | – | – | 0.5 | 0.5 | 0.5 |
| Senior writer-analyst | $96,000 | Month 37 | – | – | – | 1 | 1 |
| Second senior writer-analyst | $98,000 | Month 52 | – | – | – | – | 1 |
| Total payroll incl. on-costs | $254,550 | $342,180 | $377,830 | $499,750 | $593,095 |
Marcus runs the site in January with a contract developer working about 20 hours a week. The first staff writer-analyst joins in month 4, once the launch backlog of commissioned guides is published, and an audience and email marketer joins in month 10 as paid campaigns scale. A half-time member support role starts in month 25, a senior writer-analyst in month 37 and a second senior writer-analyst in month 52. The half-time support salary of $31,000 is a part-time wage. The founder's $90,000 starts in month one and is already in the costs, so every profit line is after Marcus is paid.
Income statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $233,188 | $426,885 | $711,819 | $1,075,562 | $1,471,135 |
| Direct costs (card and billing fees, ad-network fees, course platform fees) | ($12,461) | ($22,811) | ($38,037) | ($57,475) | ($78,613) |
| Gross profit | $220,727 | $404,074 | $673,782 | $1,018,087 | $1,392,522 |
| Payroll incl. on-costs | ($254,550) | ($342,180) | ($377,830) | ($499,750) | ($593,095) |
| Rent | ($21,600) | ($26,400) | ($30,000) | ($40,000) | ($41,200) |
| Utilities | ($2,400) | ($3,000) | ($3,300) | ($3,600) | ($3,800) |
| Marketing | ($56,000) | ($70,000) | ($85,000) | ($95,000) | ($100,000) |
| Insurance | ($12,000) | ($15,000) | ($18,000) | ($21,000) | ($23,000) |
| Professional fees | ($16,000) | ($18,000) | ($20,000) | ($22,000) | ($24,000) |
| Software subscriptions | ($30,000) | ($36,000) | ($44,000) | ($52,000) | ($58,000) |
| Market-data licence | ($18,000) | ($22,000) | ($28,000) | ($33,000) | ($37,000) |
| Freelance writers and illustrators | ($30,000) | ($36,000) | ($42,000) | ($46,000) | ($50,000) |
| Refunds and chargebacks | ($1,500) | ($4,000) | ($6,000) | ($8,500) | ($11,000) |
| Phones, supplies and events | ($4,500) | ($6,000) | ($7,500) | ($8,500) | ($9,000) |
| Equipment replacement and new-hire kit | $0 | ($6,000) | ($5,000) | ($9,000) | ($5,000) |
| Bad debt allowance (sponsor invoices) | ($1,000) | ($2,500) | ($4,500) | ($6,000) | ($7,000) |
| Annual pay raises (3% a year) | $0 | ($10,265) | ($23,010) | ($46,340) | ($74,439) |
| EBITDA | ($226,823) | ($193,271) | ($20,358) | $127,397 | $355,988 |
| Depreciation | ($17,000) | ($17,000) | ($17,000) | ($3,000) | $0 |
| Interest | $0 | $0 | $0 | $0 | $0 |
| Income tax | $0 | $0 | $0 | $0 | $0 |
| Net income before start-up costs | ($243,823) | ($210,271) | ($37,358) | $124,397 | $355,988 |
| Start-up costs expensed at opening (securities counsel, licences, launch marketing) | ($39,500) | $0 | $0 | $0 | $0 |
| Net income after start-up costs | ($283,323) | ($210,271) | ($37,358) | $124,397 | $355,988 |
Year 1 loses $243,823 before start-up costs and $283,323 after them. The loss narrows in Year 2 and nearly closes in Year 3: EBITDA is ($20,358), a margin of -2.9%. Year 4 is the first profitable year at $124,397, and Year 5 reaches $355,988 on a 24.2% EBITDA margin. Payroll is 109% of Year 1 revenue and 45% of Year 5 revenue. The nil tax charge is explained under the inputs.
Where the cash goes
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Cash from operations | ($272,712) | ($198,578) | ($28,165) | $117,432 | $345,150 |
| Site build and equipment | ($54,000) | $0 | $0 | $0 | $0 |
| Funding received | $720,000 | $0 | $0 | $0 | $0 |
| Debt repaid | $0 | $0 | $0 | $0 | $0 |
| Owner distributions | $0 | $0 | $0 | $0 | $0 |
| Net change in cash | $393,288 | ($198,578) | ($28,165) | $117,432 | $345,150 |
| Closing cash | $393,288 | $194,710 | $166,545 | $283,977 | $629,127 |
Cash ends every year above zero, and the lowest year-end figure is $166,545 in Year 3. After that it recovers as the site covers its costs. No distributions are paid, so the cash that builds in Years 4 and 5 stays in the business.
Balance sheet
| At year end | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Cash | $393,288 | $194,710 | $166,545 | $283,977 | $629,127 |
| Accounts receivable | $6,389 | $11,695 | $19,502 | $29,467 | $40,305 |
| Site build and equipment (net) | $37,000 | $20,000 | $3,000 | $0 | $0 |
| Total assets | $436,677 | $226,406 | $189,047 | $313,444 | $669,432 |
| Borrowings | $0 | $0 | $0 | $0 | $0 |
| Paid-in capital | $720,000 | $720,000 | $720,000 | $720,000 | $720,000 |
| Retained earnings | ($283,323) | ($493,594) | ($530,953) | ($406,556) | ($50,568) |
| Total liabilities and equity | $436,677 | $226,406 | $189,047 | $313,444 | $669,432 |
Margins, break-even and payroll load
| Measure | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| EBITDA margin | -97.3% | -45.3% | -2.9% | 11.8% | 24.2% |
| Net margin (before start-up costs) | -104.6% | -49.3% | -5.2% | 11.6% | 24.2% |
| Payroll incl. pay raises as share of revenue | 109% | 83% | 56% | 51% | 45% |
| Revenue per full-time equivalent at year end | $77,729 | $142,295 | $203,377 | $239,014 | $267,479 |
| Average monthly revenue | $19,432 | $35,574 | $59,318 | $89,630 | $122,595 |
| Monthly revenue needed to cover operating costs | $39,401 | $52,589 | $61,111 | $78,414 | $91,254 |
| Debt service cover (EBITDA / interest + principal) | – | – | – | – | – |
The last two rows of the ratios table give the break-even test. In Year 3 average monthly revenue is $59,318 against $61,111 needed, a shortfall of $1,793 a month. Year 4 averages $89,630 against $78,414 needed, and the site covers its running costs from then on. The debt row is empty because there is no borrowing.
If fewer readers convert and more members cancel
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $205,782 | $343,524 | $555,744 | $827,604 | $1,119,402 |
| Net income before start-up costs | ($269,842) | ($242,763) | ($114,640) | $20,569 | $195,291 |
| Net income after start-up costs | ($309,342) | ($242,763) | ($114,640) | $20,569 | $195,291 |
| Closing cash | $368,020 | $138,484 | $35,029 | $51,150 | $238,446 |
This case lowers the conversion rate from 1.7 to 1.36 new members per 1,000 visitors and raises monthly churn from 5.25% to 6%. Traffic is unchanged, so display advertising falls only 10% for softer sponsor rates, while referral fees and course sales fall 20%. Revenue ends 12% below plan in Year 1, 22% in Year 3 and 24% in Year 5. The response starts in month 13, once a year of data shows the shortfall: the half-time support role starts six months later (month 31), the senior writer-analyst in month 43, the second senior writer-analyst is dropped, marketing is cut by 20% and commissioned content by a quarter from Year 2, Marcus takes a 20% pay cut to $72,000, and the site does not move into a larger office in Year 4. On those terms cash ends every year at no less than $35,029, a fifth of the base-case low, which is under a month of Year 3 costs. The site is profitable from Year 4. Equity ends Year 1 at $410,658. Run separately with the same response, conversion alone 20% lower leaves a Year 3 low of $83,878, churn alone at 7.5% leaves $78,668, and conversion 30% lower with no change to churn takes cash below zero in Year 4 (a low of ($895)). A rise in the cost of paid members has the same effect as a fall in conversion, so the 30% case is a guide to a large increase in acquisition cost.
Sources
- Investment Advisers Act of 1940, section 202(a)(11), 15 U.S.C. § 80b-2 (definition of investment adviser and the publisher exclusion in (a)(11)(D)).
- Supreme Court of the United States, Lowe v. SEC, 472 U.S. 181 (1985), decided 10 June 1985.
- Securities Act of 1933, section 17(b), 15 U.S.C. § 77q (disclosure of consideration for describing a security).
- Federal Trade Commission, Disclosures 101 for Social Media Influencers, on disclosing material connections; the page points to the FTC Endorsement Guides.
- Bureau of Labor Statistics, Financial analysts (2025 median pay, 2025 to 2035 projections) and Writers and authors (May 2025 median pay, 2025 to 2035 projections), Occupational Outlook Handbook.
- Virginia Department of Taxation, Corporation income tax (6% rate).
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